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Land acquisition bill will push up prices five times: CII chief

The Hindu Business Line, Chennai

March 08, 2012


The President of Confederation of Indian Industry (CII), Mr B. Muthuraman, on Thursday said that the Land Acquisition, Rehabilitation and Resettlement Bill, 2011, would cause a five-fold increase in land prices to the industry.

"No industry will be able to afford that," he said in an interaction with journalists, on the sidelines of a conference on the theme "Tamil Nadu: Vision 2025".

The Bill is expected to be presented to the Parliament in the coming Budget session.

Both during a chat with journalists and earlier in his address at the conference, Mr Muthuraman said that the proposed Bill takes matters back beyond 1894, when the previous Land Acquisition Act was brought into force. He noted that the 1894 Act recognised government procuring land and giving (selling) it to the industry as a "public cause".

The industry, "with a great difficulty", got the 'public cause' concept introduced in the current Bill, but nevertheless the proposed legislation speaks of 'consent of people', which makes it difficult for the industry, Mr Muthuraman said.

Mr Muthuraman said that it was the government's job to acquire land for the industry. He said that the National Manufacturing Policy, which speaks of the government acquiring large tracts of land and keeping them ready for the industry, was on the right track.

CII's suggestion

Mr Muthuraman said that a good way of handling land acquisition would be to calculate how much the incumbent owner of the land earns out of his holding and paying him a price that would improve upon his present earning. "This is how we did it in Tata Steel," Mr Muthuraman, who is also the Vice-Chairman of Tata Steel, said. On the power sector, Mr Muthuraman said that the system of 'tariff-based award of power projects' would not work. He said that the prices of coal would have to be passed on to the buyer of the power, or else no project would come up, given the volatility in coal prices.

Earlier, speaking at the seminar, Mr N K Ranganath, Chairman, CII-Tamil Nadu, observed that there was no set-aside of land for use by the industry, unlike for agriculture. He also wanted 25-year plans for the power sector.